Financial and economic news, information, tips, etc.
Originally posted as a note on my Facebook page.
The long & short of the ongoing "fiscal crisis" is that it is, at this point, an artificially manufactured crisis that is causing serious real-world issues. The delusion & deceptive "national conversation" that the traditional media insists on promoting isn't helping.
Case in point: a piece from the Washington Post1 makes the following statement:
Ideally, the budget environment for weather and climate research wouldn’t be an either/or situation. State of the art computing resources should be available to both areas.But during a time when our nation faces a fiscal crisis and the government is having to make tough choices about what the highest priorities are - leadership within NOAA and Congress should take a close look at the balance of resources...
There are a couple of things wrong with that. The first one that leaps out and grabs my face like one of the creatures from Alien is "during a time when our nation faces a fiscal crisis" - really? Simply letting the Bush-era tax cuts for the rich expire would substantially resolve that, but the fiscally feral Republican, Tea Party & Libertarian extremists keep pushing for more tax breaks for the wealthy...hoping, apparently, that the rest of the nation is either too pre-occupied or distracted to notice just how much damage that those tax cuts have done, or who has benefited.
Written by an American expat living in the E.U. (who holds a M.B.A. degree). This diary is a review of the Spiegel article entitled "Has America Become an Oligarchy?" from the perspective of a business librarian.
My email is: email@example.com
Spiegel quote: 2002 and 2007, 65 percent of the income gains went to the top 1%
Almost every major advance of the US economy has been nurtured or facilitated at some point by the active involvement and encouragement of the national government. It's been a partnership - sometimes uneasy, sometimes close, but a partnership - between government and free enterprise, that has led the development of the US economy. This role of the national government was deliberately written into the Constitution, and touches directly on Constitutional issues that the left has ignored, but which the wrong-wing has long waged a smear campaign against. These issues go to the heart of the question: What is the role and purpose of government? They include such specific issues as the General Welfare clause, states rights, implied versus enumerated powers, and the reach and scope of the Commerce clause.
Contrary to the idealized wrong-wing myth of the U.S. economy being founded on the principles of laissez-faire, the framers of the Constitution deliberately set out to create a central government strong enough to force the thirteen states into one national economy. To do this, the national government undertook a number of programs and policies to build and strengthen the national economy by encouraging and protecting manufactures and commerce, establishing a national banking system, and promoting and directly assisting the development of transportation.
(Hint: "More of the same" is killing our nation)
The following is my opinion, and is not to be taken as synonymous with or supported by the staff, writers and editors of ePluribus Media. It is my own take on my personal observations. - GreyHawk, August 2011
Over the past decade, the GOP gutted the US infrastructure as well as the social safety net while simultaneously killing revenues from corporations and the "elite" - in addition to starting two wars, the second of which was started based on carefully manufactured lies and which was used to justify multiple constitutional violations as well as the implementation of and reliance upon crimes against humanity. The second war was kept "off books" for the most part, was highly mis-managed and lost TRILLIONS of dollars.
To fix this mess, another stimulus - this time grounded in a strong infrastructure program and new energy policy - is needed along with single-payer health care, Wall Street & banking reform, closing of loopholes and tax revenues from the expiration of the Bush tax cuts.
Getting even 1 of those things will be a miracle with the current Congress.
The US people need to vote out the GOP and Tea Party from all levels of government - local, state & federal (and yank what they can from the judiciary - which is nigh impossible) - in order to foment effective change and positive growth.
Use this as an Open Thread, and add your comments below. Thank you.
Wall Street’s Euthanasia of Industry, by Michael Hudson: Obama is selling out his constituency to his campaign contributors: that's what politicians do. But even worse, the President is a fully committed acolyte of neo-liberal economics and "has bought into the idea that the only way to get recovery is to cut wages by about 30 percent."
Cross-posted from Real Economics.
During negotiations over the federal government's debt limit this past week, President Obama appears to have achieved a major tactical victory over the Republican ideologues. I use the term "tactical" because in my view, the fundamental economic problem confronting the country remains not only unsolved, but entirely unheeded: after a half century of "neo-liberal" economic reforms, a.k.a., conservative economic deregulation, the economy is now structurally skewed to benefit a new financial and corporatist oligarchy, at the expense of everyone else. What I have striven to do, in posts such asWealth and Income Inequalities are Markers of Oligarchy, is to force the concept of oligarchy back into the national discourse. I cannot claim this as my idea: Simon Johnson's May 2009 article The Quiet Coup was a notable effort at forcing us to face up to the unpleasant fact of a new American oligarchy, and Michael Hudson has been ferocious in a number of recent posts: How Financial Oligarchy Replaces Democracy. So it was gratifying to read Mike Konczal's A Response to Corey Robin on The Political Idea of Monetary Policy:
Corey Robin has a negative response to Matt Yglesias’ argument that setting an inflation target is one of the most important goals progressives and liberals should push for, which lead to an email exchange and a second response.
The economics of monetary policy are one topic. In a balance sheet recession, with a zero-lower bound, a broken financial system and the various commitment problems the Fed faces in these moments, monetary policy is not easy. We discuss many of these economic issues here in an interview with Joe Gagnon, and that’s a debate that has been going on for a while.
Robin notes that fiscal policy is important: “The government hiring people, in other words, is a lot cheaper—and more economically beneficial—than tax cuts or employer tax credits or the stimulus bill.” I agree completely, but let’s say we get a dream infrastructure deal through Congress. If that helps the economy, and the economy starts to pick up, Bernanke and a conservative Fed could use that as an excuse to raise interest rates sooner, which would immediately cancel out that stimulus. Regardless of fiscal policy, monetary policy is never neutral in a moving economy, and thus progressives need an answer.
But Robin, a political theorist (whose book on political fear is fantastic and one of the better arguments for strong unionization that I’ve seen), is more interested in the political theory and ideas surrounding the issue, which I agree needs to be discussed more. Robin:
What both of these reasons [for monetary policy] have in common is that instead of putting money into the hands of people who not only need it but would spend it, thereby stimulating demand and more jobs, they keep (or put more) money into the hands of people who already have it and don’t need to spend it in economically beneficial ways. Presumably because they are, in Yglesias’ eyes, the real movers and shakers of the economy, as opposed to the vast majority of middle- and working-class people or the government that represents them…Share and spread the wealth, in other words, among the wealthy….
If you wanted a purer distillation of the Reaganite temper of our times, you’d be hard pressed to find it in any other notion than this: get more money into the hands of people with money, for they are the truly productive agents in our society, rather than into the hands of the people who might actually spend more money if they had more money to spend….
Hope everyone is enjoying a pleasant and long 4th of July weekend.
A suggested article from the Sunday edition of the New York Times, We Knew They Got Raises. But This?". The Times is updating an earlier study on executive compensation in the U.S. to reflect companies that had not previously disclosed pay packages on April 1, 2011.
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.
Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.
Read and weep.
Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.
In some ways, chief executives seem to live in a world apart when it comes to pay. As long as shareholders think that the top brass is doing a good job, executives tend to be well paid, whatever the state of the broader economy. And some corporate boards were probably particularly generous in 2010 after a few relatively lean years for their top executives. In other words, some of this was makeup pay.
No doubt those executives have little to weep about, outside of the off chance they might see a tax loophole closed.
I received an email from the Barack Obama campaign this morning - specifically addressed as if it was from Vice President Joe Biden - asking if I'd be willing to send in $5 for a chance at a drawing to enable 5 people to have dinner with the President.
I had to decline.
As folks may realize from the two diaries currently on the Rec list by shannika and stonedoubt, jobs are a big issue right now; the economy as a whole, of course, is a huge issue. And if you read a little into stonedoubt's diary, you'll find a comment from me that explains my response to Joe indirectly: I'm closing my business.
Below the fold is the short, simple text of what I sent back. I realize it will never be seen by Vice President Biden, or the President. I know it will likely never be read by anyone in Congress or in a position to pass along my simple response.
Nonetheless, I felt better sending it. No histrionics, no propaganda - just a simple statement and plea.
Make the jump if you'd like to read it, and perhaps add your own comment.
Cross-posted from Real Economics. Posted on ePluribus Media at 2011-06-05 22:33:23 -0400. Bumped and promoted. - GH
At the beginning of the American experiment in self-government, concentrations of wealth and large inequalities in income and wealth were viewed suspiciously as dangerously subversive vestiges of the royalty and oligarchies of Europe. But today, conservatives would have us believe, concentrations of wealth and inequalities in income and wealth should be viewed as the natural result of a social Darwinian struggle between those who work hard, and those who do not. Thus are Americans slowly but steadily being led to acceptance of the rise of a new oligarchy,
In one of the most famous of the Federalist Papers, No. 10, James Madison discussed the problem of factions, and noted that they most often arise based on economic interests. In preparation for the Constitutional Convention, Madison made notes of the defects of the Articles of Confederation. Vices of the Political System of the United States These short notes amplify and clarify Madison’s thinking on the formation of a new government. Here is a section dealing with the problem of emerging oligarchies:
Long-time activist Gar Alperovitz has an interesting article in The Nation about the emerging structure of "The New-Economy Movement.," a mostly uncoordinated group of non-profits companies and foundations, and citizen co-operatives, that have explicitly rejected the central tenet of modern Anglo-American capitalism that the profit motive reigns supreme. These are new, and some old, "institutions whose priorities are broader than those that typically flow from the corporate emphasis on the bottom line."
Among groups mentioned are the The American Sustainable Business Council, an alliance of 150,000 business professionals and thirty business organizations, whose "members are “triple bottom line” companies and social enterprises committed to the environment and social outcomes as well as profits"; the Business Alliance for Local Living Economies (BALLE); and Mondragon, one of the largest and most successful cooperative enterprises in the world, based in the Basque region of Spain, with almost 100,000 workers.
Alperovitz notes that these types of organizations are signs of a growing realization that our current economic system is not sustainable. The financial and economic crisis of the past three years has forced more and more people to question the basic principles of Anglo-American capitalism and its over-weening emphasis on profit.
The nation formerly known as the Ottoman Empire is building a strong foundation for a bright future. That nation is also addressing its scandalous recent past as it reaches out to old enemies. The dynamics producing real change in Turkey are well worth understanding. Turkey is on a path to rapid economic growth, cultural liberalization, and will emerge as a key player in world affairs.
The Turkish people elected a new government in 2002. Recep Tayyip Erdoğan became Prime Minister after his AK Party gained an absolute majority in the nation's unicameral legislature. The United States corporate media tagged the AK party as a threat to Turkey's secular democracy. This is, as usual, a perversion of the political and social realities.
Here are the key elements contributing to Turkey's success.
Cross posted from Real Economics.
I have generally been highly critical of the Obama administration and its economic policies. However, below I link to an unique and very informative DailyKos diary that examines the little-heralded efforts of the administration to improve the economic lot of average Americans by trying to support the manufacturing sector of the economy. Now, while I could easily argue that these efforts are "too little, too late," they do constitute evidence that there are some in the Obama administration who have not entirely fallen victim to the Leisure Class (Predatory Class) mentality described by Thorstein Veblen and our own Jon Larson. In this case, the writer identifies the individual: Ron Bloom, former official of the United Steel Workers Union, and currently special advisor to Tim Geithner and White House director of manufacturing policy.
Previously published on The People's View.
If you read the Wall Street Journal or right wing blogs, you know who Ron Bloom is. He is special advisor to Tim Geithner and White House director of manufacturing policy. He's a former official at the United Steel Workers Union who helped manage the auto rescue.
Mr. Bloom attended Harvard Business School, where he gravitated to populist business cases and was keenly interested in employee buyouts. After 10 years at investment banks, among them Lazard, he became special assistant to the USW president in 1996.
Both inside and outside the USW, Mr. Bloom is known as a financially savvy negotiator — with a tendency to spout profanities WSJ
Right wing blogs are more straightforward
Is there really any doubt that Obama and his administration are a pack of radical Leftists?
Look for Bloom on Youtube and you'll see - they really really hate him. Here's what got our right wing compatriot's underwear in a twist. Speaking as a union official at " 6th Annual Distressed Investing Forum" Bloom said:
Generally speaking, we get the joke. We know that the free market is nonsense. We know that the whole point is to game the system, to beat the market or at least find someone who will pay you a lot of money, 'cause they're convinced that there is a free lunch.
We know this is largely about power, that it's an adults only no limit game. We kind of agree with Mao that political power comes largely from the barrel of a gun. And we get it that if you want a friend you should get a dog.
Absolutely nothing that Bloom said is even controversial on Wall Street, but according to American Right Wing Propagandists, working people are supposed to naively believe in the stories told to them by the economists. Read more.
The author also performs the excellent service of criticizing Robert Reich, and liberals and progressives in general, for ignoring and even disliking the manufacturing sector. As the author notes, back in June 2009, Reich opined on the auto bailout by diving fully into the cesspool of a "post-industrial policy":
Seriously, is this the best the financial elite can do? The Money Party is running on fumes.
The Financial Times reported that French Finance minister Christine Lagarde was the leading candidate for Managing Director of the International Monetary Fund (IMF). She would replace Dominique Strauss-Kahn, now charged with sexual assault in New York City. (Images: Wiki Commons)
Christine Lagarde, France’s finance minister, has emerged as the leading contender to run the International Monetary Fund after being strongly endorsed by her German and British counterparts, eager to extend Europe’s 65-year grip on the global financial institution. Financial Times May 22
With the UK, Germany, and France supporting Lagarde, a favorable nod from the Obama Administration would assure her the job.
Since its creation in 1945, IMF has had an unbroken string of European managing directors.